Supply chain challenges push IMI to Q3 loss

October 29, 2021 | 6:32 pm

Integrated Micro-Electronics, Inc. (IMI) swung to a $1.28-million net loss attributable to equity holders of the parent company in the third quarter from a $9.1-million profit during the same period in 2020, citing challenges arising from the global supply chain snarls and lockdown restrictions.

In a statement, the manufacturing arm of AC Industrial Technology Holdings, Inc. reported revenues from its contracts with customers inched up two percent to $319 million during the July to September period.

“Customer demand is still strong and we continue to win projects in strategic segments of the industry. However, the extended component shortage is forcing us to delay a significant amount of business,” IMI President Jerome S. Tan said in a statement on Friday.

IMI’s wholly-owned businesses saw revenues grow by five percent year on year to $249 million, while revenues for VIA optronics and Surface Technology International (STI Ltd.) went up by four percent to $77 million.

IMI said business margins and growth remain dampened by the global supply chain issues and local lockdown restrictions that have affected the recovery of major suppliers in the component industry.

“Just as supply chain challenges were starting to show signs of easing, rising [COVID-19] Delta cases in chip manufacturing regions has pushed back the recovery timeline. The situation has been further complicated by global shipping bottlenecks and expensive logistic expenses in 2021,” Mr. Tan said.

Global freight expenses have soared amid port congestion and shortages of shipping containers.

“The industry is now forecasting a staggered recovery in 2022, which is when we expect to clear the order backlogs in our facilities,” he added.

For the January-to-September period, IMI narrowed its net loss attributable to equity holders of the parent firm to $5.32 million, 55% lower than the $11.89 million in the same period last year.

Nine-month revenues grew by 23% to $972.97 million from $788.62 million a year ago.

Shares of IMI declined by 2.42% or 22 centavos to close at P8.88 apiece on Friday. — K.C.G.Valmonte

AC Energy, ALI ink power supply deal

October 29, 2021 | 6:30 pm

AC-Energy's-120-MW-Gigasol-Alaminos,-Laguna — AC Energy’s 120 MW Gigasol Alaminos, Laguna

Listed power firm AC Energy Corp. said it has forged a deal to supply clean power to Ayala Land, Inc. (ALI) through 2050.

In a statement, AC Energy said its 120-megawatt solar plant in Alaminos, Laguna will supply renewable energy “that will help meet ALI’s demand up to 2050.”

“This marks a long-term partnership that will advance both companies’ net zero aspirations, eliminating 102,540 MTCO2e (metric tons of carbon dioxide equivalent) per year, or the equivalent of taking 22,291 cars off the road annually,” AC Energy said in a regulatory filing on Friday.

Both companies are part of the Ayala Group.

“We are happy to work with Ayala Land on this important initiative that will help the Ayala group achieve net zero greenhouse gas emissions by 2050,” AC Energy President and Chief Executive Officer Eric T. Francia said.

ALI President and Chief Executive Officer Bernard Vincent O. Dy said the partnership with AC Energy will help the developer advance towards its net zero goal.

Last week, Ayala Corp. has committed to work towards attaining net zero carbon emissions in next thirty years, aligning itself with the global direction for climate action.

AC Energy’s solar farm in Alaminos started commercial operations in June. The company described “GigaSol Alaminos” as the second largest plant of its kind in the country, saying it can power around 80,000 homes while avoiding 111,034.37 metric tons of carbon dioxide equivalent of greenhouse gases.

GigaSol Alaminos is surrounded by ALI’s Carbon Forest, a woodland reserve that acts as a “carbon trap.”

Shares of AC Energy in the local bourse inched down 0.32% or four centavos to close at P12.26 apiece on Friday. Meanwhile, shares of Ayala Land shed 1.54% or 55 centavos to finish at P35.10 apiece on the same trading day. — A.Y.Yang

First Gen says Avion unit now up and running

October 29, 2021 | 6:28 pm

Lopez-led First Gen Corp. said on Friday that the second unit of its 97-megawatt (MW) Avion power plant in Batangas can now operate on either natural gas and liquid fuel.

“[We have] been advised by its subsidiary, Prime Meridian Powergen Corp., that the recommissioning and testing activities of Unit 2 of the 97 MW Avion Power Plant using Malampaya natural gas have been completed and the unit is now commercially available on both natural gas and liquid fuel,” First Gen told the local bourse in a regulatory filing.

The company has previously reported that Unit 2 of the open-cycle plant went offline due to damage found in its gas turbine after a routine inspection.

PMPC, a subsidiary of First Gen, owns the Avion plant which is located within First Gen’s Clean Energy Complex in Batangas City.

The development comes around a week after the plant’s equipment manufacturer General Electric (GE) completed restoration works on Avion’s Unit 2.

Aside from Avion, First Gen has three other natural gas-fed plants namely: 1,000-MW Santa Rita, the 500-MW San Lorenzo, and the 420-MW San Gabriel. These three facilities also get their power from the deepwater-to-gas project.

Shares of First Gen in the local bourse inched up by 0.17% or five centavos to close at P30.10 apiece on Friday. — A.Y. Yang

Musk’s Starlink in talks to bring fast Internet to Philippines

October 29, 2021 | 6:27 pm

Elon Musk’s Starlink is in talks with two Philippine telcos to launch its ultrafast satellite internet in a country with slow speeds and poor connectivity.

Transpacific Broadband Group International Inc. said it’s looking to partner with Starlink for its satellite broadband venture, planning to roll out the technology by 2022. It signed an agreement with operator ABS Global Ltd. for a low-earth orbit satellite station in Pampanga province, north of the capital, according to a statement Thursday.

Low-earth orbit satellite technology offers a combination of affordability, speed, flexibility, ease-of-setup and a 27-millisecond low-latency bandwidth, it said in a stock exchange filing.

The Philippines ranks 72nd in the world for mobile internet speed and 64th in terms of fixed broadband, according to the Speedtest Global Index.

Starlink, a unit of Musk’s SpaceX, has deployed more than 1,700 satellites in low-earth orbit, a number that could eventually top 30,000 if it receives the necessary regulatory approvals and market demand warrants.

Meanwhile, fiber-optic broadband operator Converge ICT Solutions Inc. is talking to several satellite providers including SpaceX to complement its network, CEO Dennis Anthony Uy said.

“We would like to utilize low-orbit satellite technology to bridge the gap in areas that are unreachable with fiber optic cables so that we can provide quality broadband connectivity to the majority of our people,” Uy said. Converge in March said it sees room for growth by targeting the 90% of the Southeast Asian nation’s 110 million population that is still without high-speed internet. — Bloomberg

Almost 20% of households have debt — BSP survey

October 29, 2021 | 6:14 pm

ALMOST TWO in every five households had some form of debt, mostly in the form of outstanding loans and bills, 2018 data from the Bangko Sentral ng Pilipinas (BSP) said.

Outstanding loans accounted for 28.2% of household debt, while household bills represented 17.1% and credit card bills accounted for 1.6%.

Most household loans were Pag-IBIG Fund and National Housing Authority housing loans, along with vehicle financing and business financing.

The 2018 Consumer Finance Survey released by the BSP on Friday said households choose loan providers based on interest rates.

“(The) bulk of reported interest rates by borrowing households were broadly low at 1-4 percent,” the survey results said.

“Households were able to manage their loans well as most were paid on time.”

At the time, around a quarter of households with outstanding loans used digital financial services for credit-related transactions.

The average monthly income for a household of five in 2017 was P15,000, with majority of households sourcing income from employment. Only 5.1% of households did entrepreneurial work, while nearly half also had income from other sources, such as remittances.

Average monthly spending was P22,000, mostly for food.

Out of over 70% of households that own residential property, almost half owned both the house and lot while 26.2% owned only a housing unit. Almost nine percent owned other real property such as a land parcel or farm. — Jenina P. Ibañez

Central bank makes full award of short-term securities

October 29, 2021 | 6:13 pm

THE BANGKO SENTRAL ng Pilipinas (BSP) made a full award of the short-term securities it auctioned off on Friday even as its rate inched up.

The central bank raised P110 billion as planned from its offer of 27-day bills that attracted P130.25 billion in bids. However, demand was lower than the P156.81 billion in tenders offered last week.

The average rate of the one-month securities was 1.7689%, higher than 1.7684% previously. Banks asked for yields between 1.75% and 1.8%, a wider range than last week’s 1.7425% to 1.788%.

The central bank uses short-term securities and its term deposit facility to mop up excess liquidity in the financial system and guide market rates.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in a Viber message said the average yield of the bills was slightly higher ahead of the release of inflation data next week.

“(Inflation) could pick up due to higher global oil prices among seven-year highs recently amid some disruptions in the global supply chains and ahead of the winter season,” he said, noting that this could be offset by excess liquidity in the financial system.

Reuters on Friday reported that oil prices increased but were headed for the first weekly loss in at least eight weeks after Iran’s top negotiator said nuclear talks could be renewed by the end of November. A deal could lead to the lifting of sanctions on Iran’s oil exports.

Brent crude futures went up 27 cents or 0.3% to $84.59 a barrel, while US West Texas Intermediate crude futures increased by 12 cents or 0.1% to $82.93 a barrel. — Jenina P. Ibañez with Reuters

Peso climbs on expectations of lower oil prices

October 29, 2021 | 6:10 pm

THE PESO strengthened versus the greenback on Friday on expectations of lower fuel prices, with Iran likely to resume its oil exports.

The local unit closed at P50.415 per dollar on Friday, appreciating by 29 centavos from its P50.71 finish on Thursday, based on data from the Bankers Association of the Philippines.

The peso opened Friday’s session stronger from its previous day’s close at P50.63 against the dollar. Its weakest showing was at P50.67, while its intraday best was at P50.35 versus the greenback.

Dollars traded went up to $983.38 million on Friday from $899.73 million on Thursday.

The peso appreciated on expectations of a resumption of oil exports from Iran as nuclear deal negotiations resume next month, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Global oil prices corrected lower to one-week lows recently ahead of the resumption of negotiations on Iran’s nuclear deal.”

Iran’s top negotiator said nuclear talks with six world powers could be renewed by the end of November, Reuters reported. A deal could lead to the lifting of sanctions on Iran’s oil exports.

“The peso also stronger after the gauge of the US dollar versus major global currencies eased to one-month lows amid near record high US stock markets that could suggest improved global market risk appetite/risk on mode that tends to reduce the demand for safe havens such as the US dollar,” Mr. Ricafort added.

Meanwhile, a trader said the peso appreciated as US economic growth for the third quarter this year came in weaker than market expectations.

US economic growth slowed to 2% in the July to September period, down from 4.5% and 6.7% in the first two quarters of 2021. — J.P. Ibañez with Reuters

DBP approves P80-M loan for energy substations in Camarines Sur

October 29, 2021 | 6:07 pm

DEVELOPMENT Bank of the Philippines (DBP) has approved an P80-million loan to fund two energy substations in Camarines Sur.

The two 20-megavolt ampere substations of the Camarines Sur II Electric Cooperative (CASURECO II) will be put up in Naga City, Camarines Sur, DBP said in a statement on Friday.

The project will allow CASURECO II to accommodate the energy requirements of the proposed industrial park in the area and improve its capacity.

CASURECO is the biggest electric cooperative in the province. It expects to generate 10,000 new connections in the next five years.

“Implementation of these projects will improve the electric cooperative’s operational efficiency, reliability and safety,” DBP said.

The DBP also recently approved a P98.3-million loan for the initial funding for infrastructure projects in the Canaman municipality of Camarines Sur.

The loan will support housing development, a public market, an intermodal terminal, multi-purpose buildings, and a municipal memorial park and public cemetery.

DBP is the country’s designated infrastructure bank. It was the sixth-largest lender in terms of assets with P1.102 trillion as of March, based on central bank data. It also provides credit to small businesses, social services and community development. — Jenina P. Ibañez

Stocks fall as gov’t keeps NCR under Alert Level 3

October 29, 2021 | 6:00 pm

PSE-stocks — COURTESY OF PHILIPPINE STOCK EXCHANGE, INC.

STOCKS fell on Friday as the national government kept the National Capital Region (NCR) at Alert Level 3 amid expectations that restrictions would be eased further as coronavirus cases in the area continue to decline.

The 30-member Philippine Stock Exchange index (PSEi) dropped by 103.03 points or 1.43% to close at 7,054.70 on Friday, while the broader all shares index lost 34.06 points or 0.77% to end at 4,386.79.

The PSEi closed lower “after NCR’s Alert Level 3 was maintained, contrary to some market expectations of some easing to Alert Level 2,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The government announced on Friday that the Inter-Agency Task Force for the Management of Emerging Infectious Diseases decided to keep NCR at Alert Level 3 until Nov. 14.

OCTA Research fellow Guido David in a social media post on Oct. 23 said the capital’s weekly coronavirus case average went down to 996 or lower than 1,000 “for the first time since July 22 to 28”.

Meanwhile, First Metro Investment Corp. Research Head Cristina S. Ulang said the market is worried that the robust third quarter results of some companies may be overshadowed by the “perceived higher inflation expectation for the month of October due next week.”

Stocks also dropped as the United States posted a gross domestic product (GDP) growth of 2% in the third quarter, the “slowest increase since the end of last year’s recession,” Regina Capital Development Corp. Sales Head Luis A. Limlingan said in a Viber message on Friday.

All sectoral indices declined on Friday. Services dropped 37.42 points or 1.94% to 1,899.14; property gave up 45.81 points or 1.44% to end at 3,118.89; holding firms went down 91.66 points or 1.3% to 6,937.40; financials lost 17.56 points or 1.13% to close at 1,533.09; industrials went down 45.64 points or 0.42% to 10,831.23; and mining and oil declined by 8.92 points or 0.08% to 10,095.86.

Value turnover amounted to P7.7 billion on Friday with 1.12 billion shares switching hands, higher than the P7.16 billion with 921.51 million issues traded on Thursday.

Decliners beat advancers, 107 to 84, while 45 names ended unchanged.

Net foreign selling increased to P1.24 billion on Friday from the P656.64 million in net inflows logged on Thursday.

Timson Securities, Inc. Trader Darren Blaine T. Pangan put the PSEi’s nearest support area at 6,940 and its next resistance at 7,320.

Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said the market could range from 6,800 to 7,330 next week. — B.A.D. Añago

South Korea eases curbs in first step toward ‘living with COVID-19’

October 29, 2021 | 4:32 pm

SEOUL — South Korea said on Friday it will drop all operating-hour curbs on restaurants and cafes and implement its first vaccine passport for high-risk venues such as gyms, saunas, and bars, as it tries to “live with COVID-19.”

The first phase will go into effect on Monday and last for a month, officials said, with plans calling for all restrictions to be scrapped by February.

“Beginning November 1, our community will take the first step of resuming our normal life,” Prime Minister Kim Boo-kyum said at a televised government meeting. “However, we must be aware that this doesn’t mean the fight against coronavirus is over, but a new beginning.”

The push comes as South Korea grapples with high daily case numbers, though they remain far below many of the worst hit countries, and serious infections and deaths are low.

Last week, South Korea met its goal of vaccinating 70% of its 52 million people, paving the way for the planned return to normal. It has now fully vaccinated about 72% of the population, and has given at least one dose of a vaccine to more than 79.8%.

While never under lockdown, South Korea has been battling the fourth wave of infections since July when the government imposed tight gatherings and social distancing restrictions.

Outdoor sports events are allowed to take up to 50% of spectators and up to 100 people can attend musicals or concerts regardless of vaccination status. Inoculated people will be allowed to consume popcorn and soda inside movie theaters.

Visits to high-risk venues such as bars and nightclubs, indoor gyms, saunas and karaoke bars will require proof of vaccination, or a negative coronavirus disease 2019 (COVID-19) test result from within 48 hours.

South Korea has launched its own vaccine app that it says protects user privacy through blockchain technology.

While private gatherings will be allowed with up to 10 people nationwide regardless of vaccination status, restaurants and cafes will keep a cap on up to four unvaccinated people per group.

Authorities have said they will focus on hospitalization and mortality rates rather than daily mitigation and expand self-treatment for those with only mild COVID-19 symptoms.

The Korean Medical Association (KMA) and experts have warned that the timing of the switch to the new strategy, with a relatively high number of cases and as winter approaches, may fuel a rise in COVID-19 cases.

South Korea reported 2,124 new COVID-19 cases for Thursday, bringing its cumulative tally to 360,536 infections with 2,817 Deaths. — Sangmi Cha/Reuters

Heirs step up as COVID deaths rock Bangkok’s famous street-food stalls

October 29, 2021 | 4:21 pm

BANGKOK — Each morning, Adulwitch Tangsupmanee brings a cart of crispy pork belly to a run-down cinema in Bangkok’s Chinatown and sets up the same street-food stall his internationally renowned father ran for nearly 50 years before dying of COVID-19 in July.

While aromatic pork broth simmers, Adulwitch carefully places a framed picture of his late father, Chanchai, on top of the stall’s window display — adorned with Michelin guide accolades from 2018 to 2021.

“I prepared the broth for my father when he was here, and I still do it when he’s gone,” said Adulwitch, 42. “I feel he’s still around.”

Known to many as “Elder Brother Ouan,” Chanchai had stood behind that same cart selling “Guay Jub” rolled rice noodles soup for decades until he died at age 73.

He was one of at least seven well-known sidewalk chefs that Bangkok’s renowned street-food scene has lost to coronavirus in recent months, according to a Reuters count — the latest blow to the culture of single-dish stalls.

The deaths of Chanchai and his contemporaries left a legacy of rich flavors in the hands of their children, who vow to carry on traditions that over decades propelled Bangkok into a global street-food Mecca.

As the city is set to reopen to foreign visitors on Monday, Adulwitch hopes customers will again line up for his father’s noodle soup, to help him lessen the pangs of loss.

FUTURE UNCERTAIN

Bangkok’s street-food vendors were already under stress before the pandemic, having faced evictions and bans from the city’s efforts to “clean up” sidewalks in recent years, while more upscale and trendy restaurants sprang up everywhere.

Serving dishes from “Yentafo” pink noodle soup to stewed pork leg on rice, such street cooks — mostly first or second-generation Chinese immigrants — who could support families on the strength of a single dish, were already a dying breed. COVID has only accelerated its demise.

“The immediate aftermath of this is less choice for the consumer,” said Chawadee Nualkhair, author of two Thai street food guidebooks.

“And a further erosion of one of the few truly democratic places left in society, where anyone, regardless of social standing, could be found in line for a bowl of noodles or plate of curry rice.”

RECIPES AND MEMORIES

While Chanchai’s children did not hesitate taking over his stall, the children of Ladda Saetang initially debated giving up the family’s stewed-duck stand after she died in May.

Ladda, a 66-year-old lady with a kind smile known as “Grandma Si,” ran a stall just 650 meters away from Chanchai’s.

Finally, her daughter Sarisa decided to learn everything about duck stewing to honor her mother’s memory.

“I don’t want the recipe to disappear,” said Sarisa, 39. “This was her whole life.”

“I’ll be overjoyed if customers say our ducks still taste like my mother’s,” said Sarisa. “Some tell me to not quit, because they can’t find food like this anywhere else.”

Adulwitch, also, is determined his father will live on in famed rolled rice noodles.

“This stall was what my father loved most, and I love him most. I have to keep it going, no matter what,” he said. — Patpicha Tanakasempipat/Reuters

The City of Manila partners with Microsoft to improve its digital data infrastructure

October 29, 2021 | 4:13 pm

By Patricia Mirasol

The City of Manila has inked a partnership with Microsoft Philippines to support the automation and computerization of its city processes. The three partnership areas are for the creation of resident digital identification cards (IDs); the modernization of government workplaces; and the optimization of GO Manila, an official app with features such as real property payments.

“The City of Manila has taken on an enormous challenge in their ambition to become a smart city, and we look forward to working closely with them to support their transformation efforts and, hopefully, to inspire and assist other government units and agencies across the Philippines as well,” said Andres Ortola, country general manager of Microsoft Philippines, in a press statement.

Microsoft is also working with over 1,000 other local government units (LGUs) to improve their digital infrastructure and citizen services. The work, said Joanna V. Rodriguez, Microsoft Philippines’ public sector director, is made possible through collaborations with the Department of Information and Communications Technology (DICT), the Union of Local Authorities of the Philippines (ULAP), and various organizations.

“Microsoft proactively engages with both national and local government units to explore partnership opportunities,” Ms. Rodriguez told BusinessWorld in an e-mail. “With the City of Manila, we were approached by the administrative team initially.”

Among the city’s two million residents are the poorest 350,000, many of whom do not have formal identification. The digital IDs initiative is envisioned to empower this segment to register for benefits, job training, cash support, and education.

Manila’s modernization campaign also includes providing its public-school students and leadership team with Microsoft 365 (a subscription that has document and spreadsheet apps, among others) and Microsoft Workplace (a solution that streamlines work tasks and communications), respectively.

Microsoft’s AI (Artificial Intelligence) Business School for Government, a learning path that illustrates the impact of AI in the public sector, will also be provided to improve the city’s data-driven policies and governance.

“[We will] … identify points of data interoperability within the city which can be strengthened and maximized for data governance moving forward,” Ms. Rodriguez said.

A smart city is defined as an urban area that applies various types of electronic data collection sensors to manage its assets and resources efficiently.

According to the US International Trade Administration (ITA), 17 cities in Metro Manila are advancing smart city efforts such as disaster risk mitigation, resilience management, digital health and education, and data center upgrades.

The top four cities in 2018 with the highest business revenue to invest in infrastructure development were Makati ($280 million), Manila ($209 million), Pasig ($197 million), and Quezon City ($323 million). ITA reported that these Philippine cities, including Cebu and Davao, are good prospects for firms interested in offering smart city solutions in the country.